September 10, 2010; Source: New York Times |  A group called the U.S. Chamber Watch, established by labor unions to keep an eye on the political doings of the U.S. Chamber of Commerce, contends that the Chamber has misused philanthropic support for political purposes. The allegedly misused funds are $18 million in loans and grants to the National Chamber Foundation from the Starr Foundation. The Chamber Foundation has ultimately funneled the money to the Chamber itself for political causes.

The Starr Foundation was created by Maurice “Hank” Greenberg, the founder of insurance behemoth and federal bailout beneficiary, AIG. The Chamber has been a vocal defender of Greenberg who was the longtime subject of SEC and New York State Attorney General investigations until and even after AIG put him on the sidelines. Odd, but we said as much from our perches at the Nonprofit Quarterly here, here, and here. And also here on TortDeform.

Greenberg’s virtual control of the Starr Foundation made it susceptible for use in efforts to build or restore Greenberg’s standing or bolster his defense of innocence about AIG’s misdeeds. We caught this in 2007 and Chamber Watch is onto it this year. Now the question is, when will the IRS go after not just the Chamber of Commerce and its foundation arm, but also the Starr Foundation itself?—Rick Cohen